Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

It's not double counting, it's just the average difference from CPI vs McDonalds hamburger inflation

Bad facts are not useful. The article compares the consumer sentiment index from the 80s with today's. That's a made up number, only relevant for short term relative comparisons. Long term absolute comparisons have little value. What's the Y axis on that?

>If your $1000 becomes $1600, and prices went up 30%, then you can buy more stuff then before.

Again, your money does not increase like this. Only assets do. Stocks in particular go up in price due to inflation and naturally-occurring profit. You're the one asserting that assets ought to be brought into it, and I've been telling you that assets do not avoid the consequences of inflation.

>I don't care what you define profit as.

>The comment I replied to didn't use the word profit, and I didn't use the word profit in my reply. You brought the word profit into the conversation. I didn't use the word profit the way you wanted, I guess. So I will stop using the word profit. Problem solved.

Look, I don't think the original comment mentioned stocks either. You're the one who brought that into the equation. They did not gain because of inflation. They at best held value despite inflation. The reason they went up in terms of dollars is largely due to the depreciation of the dollar, and secondarily because of profits (using the dollar-based definition or purchasing-power definition, it doesn't matter). You're pointing to stocks as if they are a life hack for beating inflation, or even something to be taken for granted, and I'm here to tell you that they're not.

>You mentioned fixed incomes increased based on official CPI numbers earlier, right? That's enough to prove the point I was making. The cost of living adjustment just has to be more than 0 for my argument to be correct.

When they say the number is 6-8% and inflation is raging at 20%, your "point" is not helpful. Even if you're right, it's a pointless observation. Inflation is still bad mmmkay?

>Lagging doesn't affect my point as long as the lag is less than four years. Gaslit too-small numbers don't affect my point as long as the gaslit numbers are still above 0.

What does 4 years have to do with it? With even one year of high prices, you will lose a hell of a lot of money.

>Let's have an example number. For this example let's pretend prices went up 30%. If I say "relative to your income and savings, you're paying 25% more", I'm not saying "it's not so bad". That situation is really bad. I'm just saying it's not 30%. > >And it's important to realize that those numbers are different if we want to do accurate calculations about inflation. I'm not pointing out the difference for the sake of pedantry.

You are getting awfully pedantic. We talk about inflation in terms of price hikes because that's something that affects everyone. Accounting for all the inflation avoidance schemes and possible wage increases that people get to cope with inflation would require a different statistic. Those coping mechanisms are a red herring when it comes to the actual performance of our currency, which is what people actually care about.

Your account has been breaking the site guidelines repeatedly and we have to ban that sort of account, so if you'd please review https://news.ycombinator.com/newsguidelines.html and stick to the rules from now on (regardless of how wrong anybody else is or you feel they are), we'd appreciate it.

The 1960s supply chain isn't there anymore. Where are you going to find, for example, asbestos insulation? No single company can take that all on. It would require coordination across much of the entire population.

Perhaps housing is important enough to see the people do that. But even if you could somehow faithfully recreate the entire supply chain, the house won't be up to code. That 100-billion dollar company is going to spend all that money in the courts. Why bother?

Okay, sure, if the people can come together to recreate the supply chain they can also change the code. But then who actually wants to live in a 1960s home? Even the homes actually built in 1960 that are still standing, which is generally going to be those that were built to a higher standard, have been upgraded to modern standards, at significant cost, over the years because nobody actually wants to subject themselves to the 1960s.

And even if you could build the perfectly equivalent house with modern supplies and people actually wanted to live in them, there is still that pesky labour cost, which is a significant portion of the building cost. Yes, the median income of a full-time male in 1960 is almost exactly the same as the median income of a full-time male today, but the median income of the population at large doesn't tell the story of those building houses. Someone who would have worked on a job site in the 1960s is more likely to work in something like a restaurant today. As a result, of those who still are willing to build houses, you have to pay a lot more to get them to show up. "The trades are where the money is now" may have become somewhat of a meme, but there is also a kernel of truth to it.

Now, a business that can make modern houses less valuable will be on to something. That's a 100-billion dollar company. But also a hard problem to solve.